$2,500 a month starts at 6% a year.
Can a moving-average guard make SPY safer for retirement?
Strategy in short: Hold 80% SPY when the latest completed month-end level is above its 12-month average. Otherwise hold 20% SPY and 80% T-bills.
Retirement answer: SPY moving-average guard supported more starting spending than Always SPY: 5.2% versus 3.4% a year funded 30 years in at least 95% of both sets of histories. These are historical thresholds, not recommended spending.
Return comparison: Always SPY made more money in this backtest. SPY moving-average guard ended with $175,743 and Always SPY with $275,309.
Growth of $10,000 — logarithmic scale
SPY moving-average guard had a deepest fall of 14.3%, compared with 50.8% for Always SPY.
See when the moving average reduced SPY exposure
The rule keeps some SPY at all times and cuts the allocation from 80% to 20% after SPY falls below its 12-month average.
The rule reduced exposure during 389 months. Across those months, SPY compounded to a gain of 2656%.
During the lower-exposure months, SPY rose in 253 months and fell in 135 months. That is where the rule either gave up gains or avoided losses.
SPY moving-average guard$175,743-14.3% deepest fall
Always SPY$275,309-50.8% deepest fall
February 1994 through June 2026. Distributions are reinvested. The calculation charges 0.10% of each risky asset bought or sold. There are no withdrawals in this graph. Equal percentage moves take equal vertical space. Past results do not predict future results.
Did the moving-average guard support more monthly spending?
At the comparison's hardest point, SPY moving-average guard left $868,810 and Always SPY left $508,301 after the same withdrawals.
The strategy left $360,509 more invested. That made the same spending a smaller burden while the portfolio recovered.
Example: You have $500,000 and need $2,500 a month—6% a year.
The same spending then equaled 5.0% a year.
The same spending then equaled 8.6% a year.
What funded at least 95% of both history tests?
SPY moving-average guard supported a 5.2% starting annual withdrawal for 30 years: 389 ordered starts and 4,751 of 5,000 mixed histories funded every withdrawal.
These are historical thresholds, not recommended spending amounts or a promise of future success.
Test if SPY moving-average guard can fund your early retirement with your own numbers
Enter your portfolio, monthly spending, and how long the money needs to last.
$2,500 a month for 30 years starts at 6.0% of the portfolio each year.
In these backtests, sometimes. Neither strategy funded this early retirement in at least 8 out of 10 histories tested.
389 starting months; the fund's record repeats in order when needed
- SPY moving-average guard
- 350 funded
- Always SPY
- 332 funded
5,000 histories built from 8–12-year pieces
- SPY moving-average guard
- 3,506 funded
- Always SPY
- 3,186 funded
A path funded the goal only if it paid every inflation-adjusted monthly withdrawal for 30 years. Results use the nearest 0.1 percentage-point starting withdrawal rate. They reuse one 32-year market record and are not a probability about your future.
How the FIRE calculator works
The calculator applies the portfolio value, monthly withdrawal, and number of years you enter. The first withdrawal occurs before the first month's return, and later withdrawals rise with U.S. inflation. A history counts as funded only if it pays every monthly withdrawal for the full period and finishes above zero.
One result begins at each of the 389 months in the fund record and follows that record forward in order, returning to its first month when more months are needed. The other builds 5,000 longer histories from linked 8-, 10-, and 12-year pieces of the same record. The calculation charges 0.10% whenever SPY is bought or sold and excludes personal tax.
At every repeated or rearranged join, market signals use the real observations that preceded the incoming historical month. Portfolio value, withdrawals, inflation and strategy state continue without resetting.
Strategy in detail
Hold 80% SPY when the latest completed month-end level is above its 12-month average. Otherwise hold 20% SPY and 80% T-bills.
The moving average reacts after weakness has persisted. That delay can miss the start of a fall and helps avoid treating every small decline as a reason to leave.
Research has found that market direction can persist for months in many asset classes. See the 2012 time-series momentum study and a longer study across 67 markets. Those broad findings make the idea plausible; they do not validate this exact rule.
Can I trust these results?
My evidence-weighted estimate is about 66% that the main effect would persist in a new long market period. That makes the result promising, not dependable enough to treat as a promise.
The direct test covers February 1994 through June 2026. It includes fund distributions, T-bill returns, inflation and the stated trading costs, but it is still one U.S. market record. The longer retirement histories repeat it or link 8–12-year pieces; they test difficult orders, not new historical evidence.
Treat the result as evidence about how the rule behaved, then compare it with simpler alternatives and your own ability to follow it through a bad period.
Methodology details for the nerds
How I ran the return comparison
The test starts with the amount shown on the graph. Each decision uses only information already complete at that month-end. Distributions are reinvested, T-bills earn the published three-month rate, and the calculation charges 0.10% of each risky asset bought or sold.
How I tested retirement withdrawals
The first withdrawal occurs before the first month's return. Spending then rises with U.S. inflation. One panel checks every starting month in order; the other links 5,000 histories from 8-, 10-, and 12-year pieces. A path counts only if it pays every withdrawal and remains above zero.
Data and important limits
The calculation uses adjusted fund returns plus U.S. government T-bill and inflation data. Personal tax, spreads beyond the stated cost, and investor behavior are not included. A real fund can differ from its index because of fees and tracking.
Keep comparing
See where this strategy ranks.
Use this result
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Enter what you have and what you want to spend each month. Compare three portfolios against the same market history. Your financial figures stay in your browser.
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